Tuesday, June 18, 2013

Who'd a thunk it?

“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

--Adam Smith, Wealth of Nations

Today's illustration that old Adam knew of what he spoke comes from The Wall Street Journal, which details the travails of Tesla Motors' attempts to sell their high end electric autos online, bypassing local dealers who've captured the regulators and legislators in their states;

David Westcott, chairman of the National Auto Dealers Association who has a Buick-GMC dealership in Burlington, N.C., said Tesla's effort to sell direct to consumers was important to all dealers and something the national association was watching.

"The system has worked for a long time," he said. "We only want Tesla to play by the same rules," Mr. Westcott added.

The rules that result in higher prices for consumers, he means, but didn't say. And it isn't just in North Carolina, but virtually everywhere.

Bill Wolters, who leads the Texas Automobile Dealers Association and helped to defeat the Tesla-led proposal [to sell their vehicles through online orders], said he is worried that GM or Ford might want to offer direct sales as well, cutting perhaps 15% out of the dealer business and putting thousands of business owners under.

And depriving millions of car buyers the pleasures of negotiating sales with dealerships?